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Canada Says It Will Work With U.K. on Libor Transition

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Sept. 28 (Bloomberg) -- Canada said it will work with U.K. officials to help with a revamp of reference borrowing rates such as Libor.

Canada’s central bank will review the Wheatley report published today along with local “stakeholders,” spokesman Jeremy Harrison said today. Canadian-dollar Libor rates aren’t widely used to price loans in Canada, the central bank said. Bank of Canada Governor Mark Carney is also Chairman of the Financial Stability Board.

“The Bank is committed to working with U.K. and other authorities to ensure an effective transition towards a strengthened system for financial market reference rates,” Harrison said.

U.K. Financial Services Authority Managing Director Martin Wheatley today published a report on Libor in response to evidence the benchmark rates had been manipulated. The British Bankers’ Association should be stripped of the responsibility for managing the rate and other organizations invited to replace it, the report said, and Canadian-dollar Libor should be eliminated as part of move to reduce the number of reference rates to 20 from 150 within a year.

“Canada applauds all efforts to improve the transparency and integrity of global capital markets, including benchmark reference rates like Libor, and expects all market participants to act in a manner consistent with preserving the integrity of the global financial system,” Canadian finance department spokesman Jack Aubry said in an e-mail message.

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net